Property Investment - 8 Tips to Be a Successful Landlord

To be successful in property investment, you need to be a successful landlord. You need to ensure that all of your properties are rented out to enjoy a stream of passive rental income. Therefore, keeping your tenants happy is crucial so that they will continue to pay you rent promptly every month. Below are the 8 important tips to be a successful landlord:

1. Know Who You Are Renting To
You need to know your tenants, not just by their name and face only, but also what they do for a living and how they are going to pay for their rent on time every month. You need to ensure the continuity of their rental payments over the period of the tenancy. Be selective on your tenants as they will either make your life pleasant or difficult later if you neglect to properly select your tenants. Ideally, you would want to rent your property to a blue-chip tenant where the rentals are paid by the company. Unfortunately, not many are able to do so. Therefore, you may need to put in some extra effort to check the financial background of your tenant from the Real Estate Agent who brought the tenant. If it is a company, then you can request them to provide a copy of their latest financial report.

2. Clean Up Your Property Before Renting It Out
First impression is crucial as this will either attract your prospective tenant or put them off. Imagine putting yourself in your prospective tenant's shoes to determine whether the property is clean and presentable for you before showing it to your prospective tenants. Dirty and messy properties will take longer time to be rented out, or perhaps, may not be rented out at all. Therefore, I would normally give the walls a fresh paint and clean the carpets and floors and make sure that the kitchen is spotless before putting out my property for rent. At least I know that I've tried my best to please the prospective tenants and if successful, hopefully they'll take pride in staying there and take good care of it as I can also request that they should return the unit back in that same condition when they leave.

3. Be Strict With Rental Payment On Time
Always tell the tenant upfront that you are very particular with this condition that the tenant must never take it for granted. One incentive I would normally entice the tenant is to offer a small discount (say 5%) to the tenant if the tenant pays by a certain date every month and the discount is not applicable if he fails to pay by that date. Normally, they will try to be prompt in their payment to enjoy the discount and this definitely helps in making sure that you get your rental paid every month on time, if not most of the time. You could also insist on including a penalty clause in the tenancy agreement to discourage late rental payments and if the tenant is not comfortable with it, then that should be an early warning sign to you whether you should rent your unit to them.

4. Respond To Your Tenant's Needs Within 24 Hours
Attend to your tenant's needs as soon as you can as this will boost your reputation as a good landlord. Even though you can't solve their problems immediately, at least you show to them that you care enough to attend to them in their times of need. However, don't delay in fixing the problem. This has helped boost my reputation as a good landlord as my Japanese expatriate tenants have recommended their successors to rent from us when their Company posted them back to Japan. I did not have to worry about the discontinuity of the rental payments when these tenants left. Even word gets around to other Real Estate Agents that we are good landlords that they also put a good word to their new prospective tenants by recommending our property to them.

5. Don't Be Too Calculative
Whenever there are any minor repairs requested by your tenant, don't be too calculative if you got a really good tenant renting your property. I would normally take care of the repair costs if it's below $100 and this would make your tenants happy knowing that you even care to pay for their minor repairs. For any major repairs not entirely due to their fault, then I would offer to pay only half of the costs as this would ensure both parties bear part of the costs to minimize such occurrence from happening again.

6. Be Flexible With Your Rental Expectations
It's important to be flexible with your rental expectations and not to be penny wise and pound foolish. A wise landlord rents for just below the market rate as it would be easier to get it rented out soonest possible. The obvious reason is to make sure that your property generates rental soon enough to help you in your monthly mortgage payments instead of risking your property being vacant for a longer period while waiting for a higher rental expectation.

7. A Little Effort Goes A Long Way
Send a greeting card to your tenants during their festival celebration days. If you know their birth dates, wish them on those days and if possible get a small gift for them. They will be surprised and happy to receive such greetings and gifts as this shows your sincerity and care to share these special occasions with them. Building a good relationship with your good tenants will often ensure that they continue to rent from you after the tenancy expires unless they have to move to a different location elsewhere due to other reasons.

8. Offer Additional Services
Think of ways to try to differentiate yourself from other landlords by offering extra services such as to offer to pay their utility bills when they are due. Of course, with the convenience to pay your bills online, it would not take too much of your time and effort to pay the bills on their behalf too. Request that they pay the amount of their utility bills to you first, and then you can settle the payment online. Especially where some of these utility bills are under the landlord's name, it is to your best interest to ensure that these bills are paid on time rather than to let it accumulate into arrears later on should the tenant fails to pay them.

These tips above are especially useful if you have a good tenant that you wish they could stay in your property for as long as possible. Again, remember that the tenants are helping you to get rich by paying for your mortgage and other expenses. So treat them well and they will most likely make your life pleasant during their stay in your property while you work on building up your property portfolio.